Disbrow v. Deering Implement Co.

• Decision Date: 04 May 1943
• Docket Number: 46234.
• Parties: DISBROW v. DEERING IMPLEMENT CO. et al.
• Court: Iowa Supreme Court

9 N.W.2d 378

233 Iowa 380

DISBROW v. DEERING IMPLEMENT CO. et al.

No. 46234.

Supreme Court of Iowa

May 4, 1943

C A. Williams, Jr., of Oskaloosa, for appellants.

Doran Doran & Doran, of Boone, for appellee.

BLISS Justice.

The plaintiff is the widow of Charles Disbrow, an employee of the Deering Implement Company, who was killed in a collision of a truck which he was driving in the course of his employment, and an automobile owned and operated by Dr. Lewis Bacon, of Pennsylvania. The collision was on September 18, 1940. Deceased was survived by his widow, and a married daughter Donna M. Taylor, twenty-nine years old, who qualified as administratrix of her father's intestate estate. On October 30, 1940, the widow, as the only dependent, and the employer of her deceased husband, executed a memorandum of agreement under section 1436, Code of 1939, providing for the payment by the defendants to her of $11.87 a week for a period not to exceed three hundred weeks. The Commissioner approved this agreement. On November 30, 1940, the administratrix filed in the District Court of Boone County, Iowa, in which the decedent's estate was being administered, an application for an order approving the consummation of what is termed a nonliability settlement with Dr. Bacon, through his insurance carrier, to avoid expensive and questionable results of litigation. Dr. Bacon and his representatives at all times denied any and all liability for the injury and death of Disbrow, and made no admissions of fault or negligence with respect thereto. In this compromised settlement the administratrix received $2,500. The receipt which she gave for the money recites: "Whereas Dr. Lewis H. Bacon denies all liability on account of the death of Charles Perry Disbrow, both parties desire and have agreed to compromise, adjust and settle the matter for the sum of $2500."

Other than the fact that the collision of the vehicles happened as stated herein, on Highway No. 30 near Boone, the record is silent as to the cause of the collision, or with respect to any attending circumstances. There is nothing to show that the collision or any of its consequences were due to any fault or to any negligence of Dr. Bacon. Nor does the record show that the $2,500 was paid or received in satisfaction of damages due to the collision, or because of any liability of Dr. Bacon. On the other hand the record shows that the money was paid and received to avoid litigation. The Commissioner in his order found the facts as above stated. In fact, the appellants, in their printed argument in this court, state: "It must be remembered that the defendants-appellants have not asserted or contended that the fatal injury was due to the fault or negligence of the third party."

The District Court of Boone County made an order in probate approving the settlement of the administratrix and Dr. Bacon, and authorizing the administratrix to accept the money and to receipt for the same in settlement of the claim for damages held by the estate of the decedent against Dr. Bacon. The money was received by the administratrix on December 6, 1940.

No action was ever brought by the administratrix or by the widow, against Dr. Bacon. There were no proceedings in court against him, or any recovery of damages in court, or any judgment against him. The defendants never served any notice upon the widow, or upon anyone else demanding that action be brought against Dr. Bacon, and neither defendant brought any such action.

There is nothing to show that the defendants had any knowledge of the negotiations between the administratrix and Dr. Bacon or his representatives looking to a settlement. The record is also silent as to any knowledge of, or participation in, or consent to, the settlement, on the part of the widow.

On May 31, 1941, the defendants filed with the Industrial Commissioner their written consent, as provided in Code section 1382(3), to the settlement between the administratrix and Dr. Bacon. On June 2, 1941, the defendants filed with the Commissioner their application for an order allowing a credit to them, for the amount of $2,500 received by the administratrix, upon the amounts paid and to be paid by them under the memorandum agreement of October 30, 1940.

To this application, the widow, Anna B. Disbrow, the plaintiff herein, filed answer and resistance, admitting the death of her husband in the automobile collision, the payment of the $2500 to the administratrix, "not in settlement of a claim for damages, but purely as a compromise and without in any manner admitting any liability on the part of Dr. Lewis H. Bacon." She also alleged: that she had never at any time made any compromise agreement with Dr. Bacon or his representatives, and that any such agreement was made by the administratrix; that there had never been any recovery of damages by her, and no legal liability or recovery of damages had ever been established against Dr. Bacon or those representing him, by judgment, admission or otherwise, and that neither the employer nor the insurance carrier was entitled to be indemnified from any source whatsoever. She further answered: that the administratrix had not been made a party to the proceeding and neither she nor the estate were within the jurisdiction of the Commissioner; that her husband died intestate leaving a daughter, who would receive two-thirds of the net estate as sole heir at law; that she as widow and claimant had never received any part of her distributive share.

Upon a hearing on the application and answer, alone, and without any testimony the Commissioner granted the application. On a petition for review a further hearing was had, also without testimony, although the commissioner stated at the hearing, that either side might offer evidence if they cared to, but otherwise the matter would be submitted on the written record. The Commissioner held that the claimant was not entitled to the relief prayed for. The District Court, on the appeal of the widow, reversed the order of the Commissioner, and denied the application of the employer and its insurance carrier for the credit prayed for.

I. The Commissioner bottomed his decision largely upon two provisions of the Workmen's Compensation Law, being paragraph 3 of section 1382, and paragraph 4 of section 1421, of the 1939 Code. The appellants follow very largely the reasons given by the Commissioner in support of his orders.

Section 1382, except as indicated by omissions therefrom, is as follows: "Liability of others-subrogation. When an employee receives as injury for which compensation is payable under this chapter, and which injury is caused under circumstances creating a legal liability against some person other than the employer to pay damages, the employee, or his dependent, or the trustee of such dependent, may take proceedings against his employer for compensation, and the employee or, in case of death, his legal representative may also maintain an action against such third party for damages. When an injured employee or his legal representative brings an action against such third party, a copy of the original notice shall be served upon the employer by the plaintiff, not less than ten days before the trial of the case, but a failure to give such notice shall not prejudice the rights of the employer, and the following rights and duties shall ensue:

"1. If compensation is paid the employee or dependent or the trustee of such dependent under this chapter, the employer by whom the same was paid, or his insurer which paid it, shall be indemnified out of the recovery of damages to the extent of the payment so made, with legal interest, and shall have a lien on the claim for such recovery and the judgment thereon for the compensation for which he is liable. *** [The omitted sentence refers to the preservation of the lien.]

"2. In case the employee fails to bring such action within ninety days, *** after written notice so to do given by the employer or his insurer, as the case may be, then the employer or his insurer shall be subrogated to the rights of the employee to maintain the action against such third party, and may recover damages for the injury to the same extent that the employee might. In case of recovery, the court shall enter judgment for distribution of the proceeds thereof as follows: *** [The parts omitted are: subdivisions (a), providing that the employer shall retain sufficient to reimburse himself for compensation paid, (b) the present worth of a sum sufficient to pay future compensation, and (c) the balance to be paid to the employee.]

"3. Before a settlement shall become effective between an employee or an employer and such third party who is liable for the injury, it must be with the written consent of the employee, in case the settlement is between the employer or insurer and such third person; and the consent of the employer or insurer, in case the settlement is between the employee and such third party; or on refusal of consent, in either case, then upon the written approval of the industrial commissioner.

"4. ***" (Italics ours.)

Prior to the 1924 Code, section 1382 appeared as section 2477-m6 of the 1913 Supplement, except for some later changes not pertinent here. It was this section which was construed in some of our decisions hereinafter referred to. Its language was as follows: "Liability of other than that of employer. Where an employe coming under the provisions of this act receives an injury for which compensation is payable under this act and which injury was caused under circumstances creating a legal liability in some person other than the employer, to pay damages in respect thereof:

"(a) Proceedings against both parties. The employe or beneficiary may take proceedings...